GROUPE DYNAMITE RAISES GUIDANCE ON EXCEPTIONAL Q2 PERFORMANCE

• 28.6% comparable store sales growth⁽¹⁾ in Q2 2025 resulting in 43.3% 2-year stack
• Fiscal 2025 guidance raised on comparable store sales growth (17.0% to 19.0%) and adjusted EBITDA margin⁽¹⁾ (32.0% to 33.5%)
• 63.6% gross margin, highest in the past four quarters despite tariff headwinds, reinforcing our luxury-inspired operating model
• Disciplined execution drives 550-bps adjusted SG&A⁽¹⁾ improvement
• Advancing UK expansion with 5 leases signed; recent North American openings outperforming

MONTRÉAL, Sept. 10, 2025 /CNW/ - Groupe Dynamite Inc. ("Groupe Dynamite" or the "Company") (TSX: GRGD) today reported its financial results for the fiscal year 2025's second quarter ended August 2, 2025. 

"We delivered an exceptional quarter. Comparable store sales grew 28.6%, driving a 43.3% two-year stack. This performance was fueled largely by higher traffic, attributable to strong brand heat and an important increase in media brand impressions. We've raised our 2025 guidance on both revenue and profitability, reflecting disciplined execution, operational agility and a luxury-inspired model that consistently outperforms. Gross margin reached 63.6%, the highest in the past four quarters. Even in a cautious consumer environment, our positioning around affordable indulgences continues to put a smile on our customers' faces," said Andrew Lutfy, Chief Executive Officer and Chair of the Board. 

"This quarter, our teams executed with precision and delivered strong results. North American openings are exceeding expectations, and our UK expansion is progressing with five new leases signed. Every function of the business, from product to marketing to our store teams, is aligned and driving performance. That alignment is fueling stronger brand experiences and deeper connections with our customers and community. With this momentum, we are positioned to elevate our performance across every market we serve," added Stacie Beaver, President and Chief Operating Officer.

Fiscal 2025 Second Quarter Highlights

• Revenue increased by 36.5% to $326.4 million in Q2 2025, compared to $239.1 million in Q2 2024.
• Comparable store sales growth of 28.6% (25.7% on a constant currency basis) in Q2 2025, over and above comparable store sales growth of 14.7% in Q2 2024.
• Retail sales per square foot⁽¹⁾ increased by 18.1% compared to Q2 2024, reaching $820 in Q2 2025.
• SG&A increased to $87.7 million in Q2 2025, compared to $79.9 million in Q2 2024, and adjusted SG&A as a percentage of sales⁽¹⁾ decreased by 550 basis points to 26.7% from 32.2% over the same period in Q2 2024.
• Operating income increased by 61.4% to $97.3 million in Q2 2025, compared to $60.3 million in Q2 2024.
• Adjusted EBITDA⁽¹⁾ increased by 49.1% to $120.5 million in Q2 2025, representing an adjusted EBITDA margin of 36.9%, compared to 33.8% for the same period in Q2 2024.
• Diluted net earnings per share increased to $0.56 in Q2 2025, compared to $0.38 in Q2 2024 and adjusted diluted net earnings per share ⁽¹⁾ increased by 43.4% to $0.57 in Q2 2025, compared to $0.40 in Q2 2024.
• Real estate activity for Q2 2025 includes:
  • Opening of 8 gross new stores in the United States under the Garage banner
  • Closure of 6 stores in Canada, 4 under the Dynamite banner and 2 under the Garage banner
  • Renovation or relocation of 4 stores: 2 in the United States under the Garage banner and 2 in Canada under both banners.

Ratios and Recent Developments

• Inventory turnover ⁽¹⁾ improved to 7.25x in Q2 2025, compared to 6.12x in Q2 2024.
• Net leverage ratio ⁽¹⁾ was 0.79x in Q2 2025, down from 1.59x in Q2 2024.
• Return on assets ("ROA") ⁽¹⁾ improved to 24.1% in Q2 2025, compared to 22.8% in Q2 2024.
• Return on capital employed ("ROCE") ⁽¹⁾ reached 45.0% in Q2 2025, compared to 41.9% in Q2 2024.
• During the quarter, the Company repurchased 355,300 shares at an average price of $19.70 for a total of approximately $7.0 million.

________
Notes:
^(1)	Refer to "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics" section of this press release for further details concerning these measures including definitions and reconciliations of each non-IFRS financial measure to the relevant reported IFRS financial measure. Non-IFRS financial measures and non-IFRS ratios do not have a standardized meaning under IFRSÒ Accounting Standards, as issued by the International Accounting Standards Board (IASB) ("IFRS Accounting Standards") which are used to prepare the Company's financial statements and might not be comparable to similar financial measures presented by other entities.
^(2)	All references to "Q2 2025" are to the Company's 13-week period ended August 2, 2025; to "Q2 2024" are to the Company's 13-week period ended August 3, 2024: to "Fiscal 2025" are to the Company's fiscal year ending January 31, 2026; to "Fiscal 2024" are to the Company's fiscal year ended February 1, 2025.

Outlook

The table below outlines the Company's revised financial annual guidance ranges for Fiscal 2025 replacing our previously disclosed guidance:

	Revised Fiscal 2025 Guidance	Prior Fiscal 2025 Guidance
Real estate activity	18 to 20 gross new store openings ↓ 8 to 9 net new store openings	18 to 20 gross new store openings 9 to 10 net new store openings
Comparable store sales growth	↑ 17.0% to 19.0%	7.5% to 9.0%
Adjusted EBITDA margin	↑ 32.0% to 33.5%	30.3% to 32.3%
CAPEX	$95.0 to $105.0 million	$95.0 to $105.0 million

Our achievement of these targets is subject to several risks and uncertainties, including the following:⁽¹⁾

• Adverse effects from future policy or legislative changes, tariffs (in addition to those currently in place) that may be imposed by the United States, or retaliatory tariffs from other countries and the United States.
• Failing to successfully locate our stores in suitable locations and any impairment of a store location, including any decrease in customer traffic.
• Failing to negotiate lease agreements for the store pipeline for Fiscal 2025, along with the risk of delays in construction activities beyond our control, and substantial increases in occupancy costs.
• Failing to complete the renovations and relocations scheduled for Fiscal 2025, which is expected to be between approximately 10 to 15, including 3 DYN 3.0 store concepts in Canada.
• Headwinds of $4 to $5 million in incremental public company costs, or a 40-basis point impact on adjusted EBITDA margin, which is included in the outlook table above.
• Achieving guidance numbers of comparable store sales or retail sales per square foot.
• Disruption of our strategic relationships with suppliers, impairing open-to-buy visibility.
• Failing to optimize merchandise, anticipate and respond to constantly changing consumer demands and fashion trends.
• Failing to protect and enhance our brands.
• Failing to attract new customers, or retain existing customers, or to maintain or increase sales to those customers.
• Failing to actively manage product margins, including the implementation of effective pricing strategies.
• Obstacles to the ongoing implementation of in-store productivity initiatives and the achievement of cost savings intended to improve operating expenses.
• Any material disruption in our information technology systems and e-commerce business.
• The occurrence of unusually adverse weather, particularly during peak seasons.
• Adverse changes in the general economic conditions and consumer spending in Canada, the United States and other parts of the world.

_____________
Note:
^(1)	The guidance ranges included in this section are forward-looking statements within the meaning of applicable securities laws, are based on assumptions that we believe to be reasonable, are subject to several risks and uncertainties, and should be read in conjunction with the "Forward-Looking Statements" section of this press release, which outlines such assumptions and describes certain of such risks.

Second Quarter Fiscal 2025 Financial Results

Revenue

Total revenue for Q2 2025 increased by $87.3 million or 36.5% compared to Q2 2024. This growth was primarily due to a 28.6% increase in comparable store sales and contributions from new stores. Online revenue for Q2 2025 was $46.7 million, representing an increase of $11.3 million or 31.9% compared to Q2 2024.

Cost of sales and gross profit

Gross profit for Q2 2025 increased by $49.8 million or 31.6% compared to Q2 2024, with gross margin⁽¹⁾ declining by 240 basis points to 63.6%, reflecting the impact of additional tariffs, partly offset by our mitigation efforts. Occupancy costs were also higher, as variable rent expenses increased with more stores exceeding their break points because of strong sales performance, while prior year expenses were lower due to the timing of expenses.

SG&A and Adjusted SG&A as a percentage of sales

SG&A for Q2 2025 increased by $7.8 million or 9.8% compared to Q2 2024. This increase was primarily driven by the Company's growing scale and activities, leading to a $7.2 million increase in wages, salaries, and employee benefits. Additionally, during Fiscal 2025, the Company strategically increased its marketing investment by launching more initiatives aimed at driving brand awareness, resulting in a $3.6 million increase in selling and marketing expenses compared to Q2 2024. Administrative costs decreased by $3.1 million, as last year was negatively impacted by $1.9 million of professional fees related to the IPO. As a percentage of sales, SG&A decreased by 650 basis points, from 33.4% in Q2 2024 to 26.9% in Q2 2025. 

Operating income and adjusted EBITDA

Operating income for Q2 2025 increased by $37.0 million or 61.4% to reach $97.3 million in Q2 2025 compared to $60.3 million in Q2 2024. Similarly, adjusted EBITDA for Q2 2025 increased by $39.7 million or 49.1% to reach $120.5 million compared to $80.8 million in Q2 2024. The adjusted EBITDA margin improved to 36.9% compared to 33.8% in Q2 2024, despite a decrease in gross margin. This is largely due to a reduction in adjusted SG&A as a percentage of sales, which decreased to 26.7% in Q2 2025 from 32.2% in Q2 2024. The 550 basis points improvement reflects the benefits of operating leverage as well as effective cost management.

Net earnings and adjusted net earnings

Net earnings for Q2 2025 increased by $23.5 million or 58.2% compared to Q2 2024. This growth was mainly driven by higher revenue, which led to increased gross profit, partially offset by higher SG&A and increased depreciation and amortization. Adjusted net earnings⁽¹⁾ for Q2 2025 increased by $22.1 million or 51.8% compared to Q2 2024.

Working capital

For Q2 2025, we have maintained a strong inventory turnover ratio of 7.25x, compared to 6.12x for Q2 2024, with current assets of $259.7 million (including $151.2 million in cash) and current liabilities of $179.6 million. Inventory continues to be minimized through agile product development and strategic sourcing, driven by our high open-to-buy ratio.

Free cash flow

The Company reported robust free cash flow⁽¹⁾, achieving $72.6 million in Q2 2025, up from $29.6 million in Q2 2024, reflecting stronger net earnings and lower CAPEX.

Net leverage ratio

The Company's net leverage ratio decreased to 0.79x compared to 1.59x last year. This improvement is due to the increase in adjusted EBITDA and the resulting increase in cash balance, along with the repayment of all of the outstanding borrowings under the credit facilities. These factors have more than offset the increase in lease liabilities and allowed the Company to reduce leverage significantly. At the end of Q2 2025, the Company has over $151.2 million in cash and $312.0 million available under credit facilities, providing flexibility to drive growth, invest in strategic initiatives and manage market volatility.

Return metrics

ROA of 24.1% for Q2 2025 has increased from the ROA of 22.8% for Q2 2024. This improvement indicates a significant boost in the Company's ability to leverage its assets more effectively than in previous periods.

For Q2 2025, our ROCE reached 45.0%, compared to 41.9% in Q2 2024, highlighting the effectiveness of our recent strategies and investments. The slower growth of average capital employed compared to adjusted operating income reflects strong capital utilization, enabling the generation of operating income.

____________
Note:
^(1)	Refer to "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics" section of this press release for further details concerning these measures including definitions and reconciliations of each non-IFRS financial measure to the relevant reported IFRS financial measure. Non-IFRS financial measures and non-IFRS ratios do not have a standardized meaning under IFRS Accounting Standards, which are used to prepare the Company's financial statements and might not be comparable to similar financial measures presented by other entities.

Selected Financial Information

	13-week periods ended		26-week periods ended
In thousands of Canadian dollars, except per share data and retail sales per square foot	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
	$	$	$	$
Revenue	326,425	239,104	553,081	427,988
Cost of sales	118,944	81,400	204,889	149,632
Gross profit	207,481	157,704	348,192	278,356
Operating expenses
Selling, general and administrative expenses	87,669	79,871	162,360	146,104
Depreciation and amortization	22,637	17,728	43,936	34,482
Foreign exchange (gain) loss	(80)	(175)	318	(662)
Total operating expenses	110,226	97,424	206,614	179,924
Operating income	97,255	60,280	141,578	98,432
Net financing costs	7,225	6,531	14,043	11,734
Earnings before income taxes	90,030	53,749	127,535	86,698
Income taxes	26,145	13,392	36,314	22,404
Net earnings	63,885	40,357	91,221	64,294
Net earnings per share^(3)
Basic	$0.59	$0.38	$0.85	$0.60
Diluted	$0.56	$0.38	$0.80	$0.60
Additional financial measures
Retail revenue	279,683	203,741	469,084	361,890
Comparable store sales growth^(1)	28.6 %	14.7 %	21.8 %	15.4 %
Retail sales per square foot^(1)	$820	$694	$820	$694
Adjusted EBITDA^(1)	120,548	80,839	187,373	136,604
Adjusted net earnings^(1)	64,756	42,698	93,151	67,494
Adjusted net earnings per share^(1) (3)
Basic	$0.60	$0.40	$0.86	$0.63
Diluted	$0.57	$0.40	$0.82	$0.63
Gross margin^(1)	63.6 %	66.0 %	63.0 %	65.0 %
SG&A as a percentage of sales^(1)	26.9 %	33.4 %	29.4 %	34.1 %
Adjusted SG&A as a percentage of sales^(1)	26.7 %	32.2 %	29.0 %	33.3 %
Adjusted EBITDA margin^(1)	36.9 %	33.8 %	33.9 %	31.9 %
Ratios and other metrics:
ROA^(1)	24.1 %	22.8 %	24.1 %	22.8 %
ROCE^(1)	45.0 %	41.9 %	45.0 %	41.9 %
Net leverage ratio^(1)	0.79	1.59	0.79	1.59
Free cash flow^(1)	72,618	29,624	114,242	66,205
Inventory turnover^(1)	7.25	6.12	7.25	6.12
CAPEX^(1)	11,151	22,620	32,222	32,855
Number of stores^(2)	299	293	299	293

	As at
In thousands of Canadian dollars	Aug 2, 2025	Feb 1, 2025
	$	$
Cash	151,221	74,195
Inventories	57,378	44,952
Total current assets	259,730	161,568
Property and equipment	136,612	107,465
Right-of-use assets	379,105	330,105
Total assets	795,533	618,637
Long-term portion of lease liabilities	396,968	340,102
Total non-current liabilities	396,968	340,102
Total liabilities	576,586	477,323
Total shareholders' equity	218,947	141,314
Total debt^(1)	431,061	372,581
Net debt^(1)	279,840	298,386

_____________
Notes:
^(1)	Refer to "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics" section of this Press Release for further details concerning these measures including definitions and reconciliations of each non-IFRS financial measure to the relevant reported IFRS financial measure. Non-IFRS financial measures and non-IFRS ratios do not have a standardized meaning under IFRS Accounting Standards, which are used to prepare the Company's financial statements and might not be comparable to similar financial measures presented by other entities
^(2)	Number of stores is as at end of period.
^(3)	Net earnings per share and Adjusted net earnings per share are calculated, after giving the effect, on a retrospective basis, to the Share Consolidation that occurred in connection with the Pre-Closing Reorganization on November 20, 2024.

Second quarter results conference call

Groupe Dynamite will hold a conference call to discuss its Q2 2025  results today, September 10, 2025, at 10:30 a.m. (ET), followed by a question-and-answer period for financial analysts. Other interested parties may participate in the call on a listen-only basis via live audio webcast, accessible through the "Events & Presentations" tab on Groupe Dynamite's website at https://investors.groupedynamite.com/.

About Groupe Dynamite Inc.

Groupe Dynamite Inc. (TSX: GRGD) is a growth-oriented company striving for excellence in the fashion industry. Operating retail stores and digital experiences under two complementary and spirited banners—GARAGE and DYNAMITE—we offer a wide range of women's fashion apparel, catering to the needs of Generation Z and Millennials. With leading key operating metrics and a commitment to innovation and disciplined execution, we are proud to continue our ambitious growth plans. Guided by our mission, "Empowering YOU to be YOU, one outfit at a time," we are a values-led, inclusive organization committed to inspiring confidence and self-expression. Proudly rooted in the chic and vibrant city of Montréal, our culture, values and distinct brands position us to shape the future of fashion while attracting and inspiring the next generation of leaders and creators. Our ownership-mentality and entrepreneurial mindset is reflected in our Shared Success Program, through which all our 6,500 employees have ownership exposure. This alignment of interests and values fosters collaboration, fuels innovation, and creates meaningful long-term value for our team and stakeholders alike.

Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics

This press release makes reference to certain non-IFRS measures, including non-IFRS financial measures, non-IFRS ratios, supplementary financial measures and certain retail industry metrics. These measures are not recognized measures under IFRS Accounting Standards and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. In this press release, we use non-IFRS financial measures including "adjusted EBITDA", "adjusted EBITDA (after rent equivalent expense)", "free cash flow", "adjusted net earnings" and "adjusted net earnings per share" and non-IFRS ratios including "EBITDA margin", "adjusted EBITDA margin", "adjusted EBITDA (after rent equivalent expense) margin", "comparable store sales", "comparable store sales on a constant currency basis", "return on assets", "return on capital employed" and "net leverage ratio". We also use supplementary financial measures including "inventory turnover", "retail sales per square foot", "gross margin", "SG&A as a percentage of sales", "Adjusted SG&A as a percentage of sales" and "CAPEX" and other operating metrics commonly used in the retail industry.

Additional details for these non-IFRS and other financial measures, which are incorporated by reference herein,  can be found in our Management's Discussion & Analysis for Q2 2025 under the section "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics", which is posted on our website at https://groupedynamite.com/, and filed on SEDAR+ at www.sedarplus.ca. Reconciliations for each non-IFRS financial measure to the most directly comparable IFRS measures are provided below.

These non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.

Non-IFRS Financial Measures and Non-IFRS Ratios

Earnings before interests, taxes, depreciation, amortization ("EBITDA"), adjusted EBITDA and adjusted EBITDA (after rent equivalent expense)

EBITDA margin, adjusted EBITDA margin and adjusted EBITDA (after rent equivalent expense) margin.

	13-week periods ended		26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
	$	$	$	$
Operating income	97,255	60,280	141,578	98,432
Depreciation and amortization	22,637	17,728	43,936	34,482
EBITDA	119,892	78,008	185,514	132,914
EBITDA margin	36.7 %	32.6 %	33.5 %	31.1 %

	13-week periods ended		26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
EBITDA	$119,892	$78,008	$185,514	$132,914
Adjustments to EBITDA
Stock-based compensation expense^(1)	1,469	981	2,129	1,840
Gain on lease modification	(813)	-	(813)	-
Professional fees related to the IPO	-	1,850	543	1,850
Total adjustments	656	2,831	1,859	3,690
Adjusted EBITDA	120,548	80,839	187,373	136,604
Adjusted EBITDA margin	36.9 %	33.8 %	33.9 %	31.9 %

(1)	This excludes the expenses related to cash-settled deferred share units granted under the Shared Success Program, as well as those paid in lieu of bonus under the Omnibus plan.

	13-week       periods ended		26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
	$	$	$	$
Adjusted EBITDA	120,548	80,839	187,373	136,604
Depreciation of right-of-use assets	(15,005)	(13,309)	(29,464)	(25,914)
Interest expense on lease liabilities	(6,973)	(5,852)	(13,498)	(11,271)
Adjusted EBITDA (After Rent Equivalent Expense)	98,570	61,678	144,411	99,419
Adjusted EBITDA (After Rent Equivalent Expense) margin	30.2 %	25.8 %	26.1 %	23.2 %

Adjusted SG&A as a percentage of sales

	13-week  periods ended		26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
	$	$	$	$
SG&A	87,669	79,871	162,360	146,104
Adjustments to SG&A
Stock-based compensation expense^(1)	1,469	981	2,129	1,840
Gain on lease modification	(813)	-	(813)	-
Professional fees related to the IPO	-	1,850	543	1,850
Total adjustments	656	2,831	1,859	3,690
Adjusted SG&A	87,013	77,040	160,501	142,414
Adjusted SG&A as a percentage of sales	26.7 %	32.2 %	29.0 %	33.3 %

(1)	This excludes the expenses related to cash-settled deferred share units granted under the Shared Success Program, as well as those paid in lieu of bonus under the Omnibus plan.

Adjusted net earnings

	13-week                   periods ended		26-week periods ended
In thousands of Canadian dollars, except per share data	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
	$	$	$	$
Net earnings	63,885	40,357	91,221	64,294
Adjustments to net earnings
Stock-based compensation expense^(1)	1,469	981	2,129	1,840
Gain on lease modification	(813)	-	(813)	-
Professional fees related to the IPO	-	1,850	543	1,850
Income tax (recovery) expense on taxable items above	215	(490)	71	(490)
Total adjustments	871	2,341	1,930	3,200
Adjusted net earnings	64,756	42,698	93,151	67,494
Adjusted net earnings per share
Basic	$0.60	$0.40	$0.86	$0.63
Diluted	$0.57	$0.40	$0.82	$0.63

(1)	This excludes the expenses related to cash-settled deferred share units granted under the Shared Success Program, as well as those paid in lieu of bonus under the Omnibus plan.

Comparable store sales	13-week periods ended			26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Variance	Aug 2, 2025	Aug 3, 2024	Variance
Retail revenue	279,689	203,741	37.3 %	469,084	361,890	29.6 %
Comparable store sales on a constant currency basis			25.7 %			19.2 %
Foreign currency exchange impact			2.9 %			2.6 %
Comparable store sales			28.6 %			21.8 %
Non-comparable store sales and others			8.7 %			7.8 %

Return on assets or ROA 

	52-week and 53-week periods ended
In thousands of Canadian dollars	August 2, 2025	August 3, 2024
	$	$
Adjusted net earnings	173,410	132,832
Average total assets	719,992	582,283
Return on assets	24.1 %	22.8 %

Return on capital employed or ROCE 

	52-week and 53-week periods ended
In thousands of Canadian dollars	August 2, 2025	August 3, 2024
	$	$
Adjusted EBITDA	354,036	276,563
Depreciation and amortization	(86,213)	(70,815)
Adjusted EBITDA reduced by depreciation and amortization	267,823	205,748
Capital employed
Average total Assets	719,992	582,283
- Average total current liabilities	(164,182)	(139,922)
+ Average short-term portion of long-term debt	9,916	19,812
+ Average short-term portion of lease liabilities	28,998	28,691
Average total capital employed	594,724	490,864
Return on capital employed	45.0 %	41.9 %

Free cash flow

	13-week periods ended		26-week periods ended
In thousands of Canadian dollars	Aug 2, 2025	Aug 3, 2024	Aug 2, 2025	Aug 3, 2024
	$	$	$	$
Cash from operating activities	83,769	52,244	146,464	99,060
Additions to property and equipment	(8,400)	(20,185)	(27,174)	(28,655)
Additions to intangible assets	(2,751)	(2,435)	(5,048)	(4,200)
Free cash flow	72,618	29,624	114,242	66,205

Net leverage ratio 

	52-week and 53-week periods ended
In thousands of Canadian dollars	August 2, 2025	August 3, 2024
Net debt	$	$
Long-term debt including current portion	-	142,777
Lease liabilities including current portion	431,061	326,712
- Cash	(151,221)	(29,173)
Total net debt	279,840	440,316
Adjusted EBITDA	354,036	276,563
Net leverage ratio	0.79	1.59

Forward-Looking Statements

This press release contains forward-looking information within the meaning of applicable Canadian securities legislation. Forward-looking information may relate to our future financial outlook (including our revised guidance for Fiscal 2025) and anticipated events or results and may include statements relating to: our business, brand positioning, brand awareness and brand expansions, recent opening and expected operational impact of our U.S. distribution center, our planned U.K expansion, our expectations on our ability to continue creating accessible fashion and delivering on-trend products, our expectations regarding the expansion and optimization of our store footprint and the achievements that can be derived therefrom, our expectations regarding reinvestment in our business, our financial performance, financial position and use of liquidity, the remodeling and relocation of existing stores, our expectations regarding our growth rates and growth strategies, and the impact of any tariffs imposed by the United States, Canada and other countries on the Company's operations and financial position. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding possible future events or circumstances. 

Forward-looking information is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Our assumptions underpinning forward-looking information include, but are not limited to, the following: expected short-, medium- and long-term discretionary spending and overall economic trends; successfully maintaining and enhancing our brands; marketing efforts, store renovations and store expansions will be successful and drive our revenue; maintaining our supplier relationships and a steady, cost-effective supply of inventories; successfully managing expenses and driving gross margin improvements; growing our e-commerce business and making headway in our international expansion efforts; successfully retaining key personnel including our chief executive officer; the absence of material changes to taxes, duties, tariffs and interest rates; the absence of further material disruptions in the international trade; the economy generally; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated, intended or implied.

Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Forward-looking information is also subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Risks and uncertainties are discussed in the "Risk Factors" section of the Company's annual information form for Fiscal 2024 (the "AIF") which is incorporated by reference into this document. A copy of the AIF and the Company's other publicly filed documents can be accessed under the Company's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR+") at www.sedarplus.ca. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The risks, uncertainties, opinions, estimates and assumptions referred to elsewhere in this press release should be considered carefully by readers. Accordingly, readers should not place undue reliance on forward-looking information. To the extent any forward-looking information in this press release constitutes future-oriented financial information or financial outlook, within the meaning of applicable Canadian securities legislation, such information is being provided to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlook, as with forward-looking information generally, are based on current assumptions and subject to risks, uncertainties and other factors. Furthermore, the forward-looking information contained in this press release represents our expectations as of the date of this press release (or as of the date it is otherwise stated to be made) and is subject to change after such date. We disclaim any intention, obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable Canadian securities legislation. All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

SOURCE GROUPE DYNAMITE INC

Contacts: Questions from investors - Investor Relations: Alex Limosani, Manager, Investor Relations and Corporate Finance - [email protected]; Questions from media - Media Relations: Youann Blouin, Director of Corporate Communications - [email protected]